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David Cameron, in Ashton-under-Lyne today, insisted the public should not be 'concerned' by the move.

'If you are entitled to welfare and can claim it then you should claim
it but if you are not entitled to it you should not get and should not
claim it,' he said.

'Private companies use all sorts of different means to make sure they are not defrauded, why should the state be any different?

'In the end it's taxpayers' money. People going out to work hard every
day do not pay their taxes so that someone can basically claim it
fraudulently. That is not right, it is not fair and I want to stop it.'

During his visit to St Peter's Partnership in Ashton-under-Lyne, a charity that helps people looking to return to work, he insisted benefit payouts had to be targeted.

'As we start to make savings to get our budget deficit under control, the first cut we ought to make is the welfare payments to people who are not entitled to it,' he said.

'The system pays money inappropriately to people who are not entitled to it so we have got to make the system work better as well. Both things, fraud and error, go together and I want to cut them both.'

Mr Cameron has ordered work and Pensions Secretary Iain Duncan Smith to draw up an ‘uncompromising strategy’ for slashing the vast sums paid out incorrectly or ‘stolen’ by benefit fraudsters.

The clampdown will include a fresh drive to bring more benefit cheats to court andclaw back cash from them.

In an article for the Manchester Evening news, Mr Cameron warned
that the £5.2billion lost each year is equivalent to the cost of
building 200 secondary schools or employing 150,000 nurses.

‘It’s absolutely outrageous and we cannot stand for it,' he said.

The Prime Minister insists the Government will not break up the welfare system, butwarns he will not tolerate abuse.

He
says: ‘We’re determined to get the welfare system right. It will always
be there for those who need it. But it won’t be a soft option.’

Mr Cameron highlights the fact that 5 per cent of those caught cheating the benefits system are never prosecuted.

Although £1.5billion a year is ‘stolen from the taxpayer’ by
fraudsters, only £20million a year is recovered – a situation he
describes as ‘simply not acceptable’.

'It’s quite wrong that there are people in our society who will behave like this but we will not shrug our shoulders and let them get away with it any longer,' he said.

'We will take the necessary measures to stop fraud happening in the first place, root out and take tough action against those found committing fraud, and make sure the stolen money is paid back.

‘So we are looking urgently at different options for reform. Tougher penalties for
fraud, more prosecutions, encouraging those who know fraud is taking
place to come forwards and making greater efforts to reclaim money
that’s wrongly paid.’

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Mr Cameron says tackling benefit fraud and error is a key part of restoring order to Britain’s battered public finances.

He writes: ‘At a time when we’re having to take such difficult
decisions about how to cut back without damaging the things that matter
the most, we should strain every sinew to cut error, waste and fraud in
our welfare system.’

But an even bigger task faces Ministers in tackling the huge sums lost in error.

An astonishing £1.6billion a year is lost in administrative mistakes, while a further
£2.1billion is wrongly paid out as a result of inadvertent errors by claimants.

Officials are looking at introducing more sophisticated systems to
keep track of people’s incomes, making it easier to pay claims
accurately.